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Mr. Deputy Speaker (Sir Michael Lord): Order. The hon. Gentleman has had his allocation.

8.4 pm

Mr. Hugo Swire (East Devon): I am left with the almost impossible task of following the high oratory of the hon. Member for High Peak (Mr. Levitt), but I shall attempt to do my level best. Indeed, I wish to emulate the hon. Member for Glasgow, Anniesland (John Robertson), who at the commencement of my speech vacated the Chamber. Were he here, I would point out to him that my constituency, East Devon, is also home to many pensioners. I think that it has one of the greatest concentrations of pensioners in the country—that is, of course, of those who are not in Glasgow, Anniesland.

It is perhaps worth remembering the hopeful words of the 1997 Labour manifesto, which stated:

"We believe that all pensioners should share fairly in the increasing prosperity of the nation. Everyone is entitled to dignity in retirement."

That is a lofty aspiration, but alas, like so many other Labour promises, it has remained just an aspiration—although I begin to doubt even that.

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For pensioners, the problem with pensions is that they are too complicated. According to Government estimates, 1.7 million pensioners receive payments under the minimum income guarantee, but Help the Aged estimates that some 2.5 million pensioners are entitled to such support. In other words, only one in five of those eligible claim the minimum income guarantee. Some suggest that that equates to as many as 770,000 people, all of whom are losing an average of £22 a week, thereby saving the Government nearly £900 million a year. That is a poor reflection on a flawed system.

Mr. Andrew Love (Edmonton): Will the hon. Gentleman give way?

Mr. Swire: I am afraid that I will not.

Pensioners are, rightly, proud. Many do not wish to be in receipt of benefits when they would be satisfied with what they regard as an entitlement. That is often at the root of it all. The minimum income guarantee claim system, which is designed to overcome the stigma of means-testing pensioners, is not working. It has cost more than £50 million to date, with no significant increase in the number of pensioners taking up their entitlement. The introduction of the pension credit is expected further to add to the complexity of the means test, and will bring more than 50 per cent. of pensioner households into the claims-led process of the minimum income guarantee or the pension credit. How does that square with the Department for Work and Pensions information sheet, which clearly states:

"The dependency culture in social services needs to end. They should be refocused to promote independence, helping people to live in their own homes and do as much as possible for themselves"?

That statement is all about the independence of pensioners, yet the Government's strategy is seemingly to make them ever more dependent. Far better the alternative that was well articulated by my hon. Friend the Member for Havant (Mr. Willetts) at the start of the debate. He suggested, among other moves, arresting the spread of means-testing by putting the cost of the pension credit into a higher-rate pension for older pensioners. That would be welcomed by many of my constituents. The elderly feel very let down by the Government. Many of them are people who have saved all their lives and were brought up in a perhaps more frugal—certainly a more responsible—age, when they were taught to be accountable for their own behaviour and certainly for their own retirement. That is the attitude that gave rise to the maxim, "Look after the pennies and the pounds will look after themselves."

This afternoon, the Secretary of State said that the Government have a responsibility to those who save. Dead right they do, but there is precious little evidence of their practising what they preach. What about those who saved all their working lives to take out private medical insurance and not be a burden on the state, only to see the tax benefit swept away, forcing many of them back on to an already overstretched national health service? That was one of the incoming acts of a pernicious Government. What about those who have suffered as a result of being forced to purchase annuities at the age of 75? It has taken a Conservative Member, my right hon. Friend the Member for Skipton and Ripon (Mr. Curry), to introduce a Bill to reform that requirement.

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In my constituency I have many pensioners and many pensioner activists, not least Mr. Venison and Mr. Applebee, whom I warmly congratulate on their forming of the Devon and Cornwall pensioners convention and the Devon action forum. A Minister promised some time ago on a radio phone-in programme that he would go to visit them, but they are still waiting.

Mr. McCartney: I promised not only a visit, which I will make, but a further interview on local radio, which has now been arranged.

Mr. Swire: I am extremely grateful to the Minister; as usual one must wait for a public announcement, rather than a response to a private letter. None the less, I am grateful for an answer for which the pensioners to whom I referred have been waiting for a year and a half or two years.

The Minister will be aware of the grey power of these pensioner conventions and forums. They are getting increasingly fed up with not being listened to and, as they see it, with being preached at. They are no longer happy to remain a silent minority.

At the end of the conference on better government for older people, the Prime Minister said:

"We can make a real difference to the lives of older people by engaging them in strategic planning and policy making. We can ensure that our services are delivered in the right way by consulting with and listening to them."

Those are Empty words to the tens of thousands of pensioners who now live in a state of heightened anxiety.

Help the Aged has said that the Government's approach to pensioners reflected widespread discrimination against older people in public policy. Research has shown that one in two Britons believe that older people are treated as if they were on the scrap heap. That is not exactly a ringing endorsement of the Prime Minister's approach and I suspect that that is a sentiment shared by his father-in-law, who is active in these matters.

Another worrying factor is the crisis of confidence that the Government have now created. There was the derisory 75p rise in the pension and, as we have heard this afternoon, the £5 billion a year raid on pensions resulting from the reforms to advance corporation tax. We have also seen the acceleration in closures of final salary pension schemes resulting from that short-sighted act. The Prime Minister has argued that the market has compensated because the stock market is now doing so well. My belief is that the stock market has come off another 130 points today, so that argument now rings rather hollow.

Yesterday, we had the most recent admission: that the Government have been working on grossly over-estimated figures for the level of contribution to funded pension arrangements. All these factors are making the savers of today—the pensioners of tomorrow—deeply cynical about the idea of a pension at all.

When that is combined with the worrying drop in the savings ratio—which is at its lowest since records began in 1963—we begin to get some idea of the scale of the problem. There is a very real possibility that millions of people will retire without enough money to live on.

It is not just the pensioners whom the Government must now seek to convince. It is all those people in work who are thinking about their retirement and do not wish to be dependent on the state, which, to my way of thinking, is always an unreliable source of largesse.

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It is perhaps timely to remember what the last great Liberal, David Lloyd George—

Mr. George Osborne (Tatton): The only great Liberal.

Mr. Swire: My hon. Friend corrects me; the only and last great Liberal. When introducing old age pensions in 1909, Lloyd George said:

"How we treat old people is a crucial test of our national quality. A nation that lacks gratitude for those that have honestly worked for her in the past whilst they had the strength to do so does not deserve a future for she has lost her sense of justice and her instinct for mercy."

We are a prosperous country, but today's pensioners are not sharing in that prosperity. The Government must, as a matter of urgency, look at ways of rectifying that.

The value of assets in our pension funds is falling. The proportion of recently retired pensioners with occupational pensions has declined from 67 per cent. to 59 per cent. between 1997–98 and 2001. The proportion of workers without a funded pension has risen from 40 per cent. to 44 per cent. in the last two years.

Of course we understand the demographic problems and the fact that people are living longer. Of course we appreciate that radical solutions are now needed. I am interested in the possibility of raising the age of retirement and being more flexible about the dividing line between being in work and being retired. But this crisis is a crisis of the Government's own making and solving it requires a commitment that, to date, has been sadly lacking.

8.14 pm

Mr. Barry Gardiner (Brent, North): Thank you, Mr. Deputy Speaker.

"Means-tested benefits for the poorest have rarely if ever been more generous. With the introduction of the pension credit next year they will become more so. Serps, the state earnings related pension scheme, is paying out the most generous second-tier pensions that the state will ever provide. And millions of pensioners are benefiting from the mighty growth in occupational pension schemes that happened in the 1950s and 1960s.


There are still plenty of troubling cases of poverty among pensioners—not least the failure of all those entitled to means-tested help to claim it. But average pensioner incomes have risen faster than the rest of society in recent years, and the average newly retired pensioner has never had it so good."

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